Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

npr.org

Post reply on HN
Print view View original

121–130 of 286 posts

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#121

Post by throwdecro »

PragmaticPulp wrote: post #20

They cite the numbers in "real terms", which would mean inflation adjusted: > The average price of American homes, in real terms, is now the highest it's ever been Of course, you really need to be looking at mortgage rates to understand housing affordability: http://www.freddiemac.com/pmms/pmms30.html July 2021 average 30-year mortgage rate: 2.87% (with 0.7 points) 2008 12-month average 30-year mortgage rate: 6.03% (…

Affordability is only part of the picture though. A higher value loan means higher risk as well.

If interest rates rise, or something else happens that reduces the value of the property, then that $500,000 mortgage might be against a house worth less than $500,000. At that point people have to start playing chicken with the banks again, trying to mitigate the losses with strategic defaults.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#122

Post by pkaye »

Panther34543 wrote: post #31

The ongoing eviction moratorium comes up quite a bit in real estate circles as one of the many reasons for current prices. Of course, the very low rates, high construction costs, demand to leave cities, and various other factors also come into play. However, yesterday I was very surprised to learn that the eviction moratorium that is preventing landlords from selling their properties is actually an order from the Cen…

I think Trump gave it through an executive order initially and Biden carried it on in his term.

https://www.nbcnews.com/politics/white-house/trump-gives-cdc...

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#123

Post by kodah »

meterplech wrote: post #105
PragmaticPulp wrote: post #20

They cite the numbers in "real terms", which would mean inflation adjusted: > The average price of American homes, in real terms, is now the highest it's ever been Of course, you really need to be looking at mortgage rates to understand housing affordability: http://www.freddiemac.com/pmms/pmms30.html July 2021 average 30-year mortgage rate: 2.87% (with 0.7 points) 2008 12-month average 30-year mortgage rate: 6.03% (…

100% true. And a good reminder of how much exposure housing prices have to interest rates. To frame the same math another way: If you bought a house for, say, $580k with a $500k mortgage... You paid $80k down payment + $20k closing costs and your monthly would be ~$2,073/month. If interest rates go up to 6%, and the person buying your house also wants to pay the same ~2,073/month, they would only be able to afford a…

It's going to be quite interesting how the bay area fairs if more companies leave over time. I've refused to buy a house thus far and have been looking into more economical (and practical ways) to live on the move given that I've had to move so much in this industry.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#125

Post by leetcrew »

larrik wrote: post #25
gnur wrote: post #7

Earlier quoted context omitted.

Anything related to storage or compute? I couldn’t image having a 2tb drive 20 years ago, but having a 2tb ssd in my laptop is kind of amazing

compute? GPUs used to basically top out at $400, now the cheap ones go for more than that.

when? the nvidia 8800 GTX launched in 2006 at $599 MSRP. it wasn't even the top card of that generation. that would be the 8800 ultra which launched eight months later at $829 MSRP. unless I'm mistaken, you would have to go back to the Ti 4600 to find a flagship GPU that launched at/under $400. that was in 2002.

ten years after the 8800 GTX, I bought a 1080 ti not long after launch for about $650. that card is more than 2000% faster, for roughly the same inflation-adjusted price.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#126

Post by [deleted] »

PragmaticPulp wrote: post #20

They cite the numbers in "real terms", which would mean inflation adjusted: > The average price of American homes, in real terms, is now the highest it's ever been Of course, you really need to be looking at mortgage rates to understand housing affordability: http://www.freddiemac.com/pmms/pmms30.html July 2021 average 30-year mortgage rate: 2.87% (with 0.7 points) 2008 12-month average 30-year mortgage rate: 6.03% (…

[deleted]

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#127

Post by mediaman »

dudul wrote: post #70
c7DJTLrn wrote: post #55

It is atrocious that the law allows using shelter as an investment. Only for the initial sale of the property should it be permitted to make profit. After that, properties should only be sold at cost between buyers.

Do you think the same about selling food for profit? or clothing? or medical care?

They don't normally think through the consequences of this type of policy.

What happens when you're barred from selling it for more than you paid?

The seller will have a price cap but will have hundreds of people who want to buy it.

How do they choose?

Maybe lavish off-the-book gifts, or maybe they choose based on how the person looks, or perhaps they arrange consulting contracts to make up payment afterward.

Would you invest in your house if you knew you couldn't get any return on it? Or would you let it run to shambles?

Imagine you were a landlord renting a unit out and a new law prohibited selling it for more than you bought it. How would that impact your decision to maintain it? Would you spend money on updating the interiors, replacing carpets, putting up new siding, if you planned on selling it within a few years?

Suppose every landlord did this. What would a typical city block start looking like?

And so on.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#128

Post by grogenaut »

strangattractor wrote: post #52
PragmaticPulp wrote: post #20

They cite the numbers in "real terms", which would mean inflation adjusted: > The average price of American homes, in real terms, is now the highest it's ever been Of course, you really need to be looking at mortgage rates to understand housing affordability: http://www.freddiemac.com/pmms/pmms30.html July 2021 average 30-year mortgage rate: 2.87% (with 0.7 points) 2008 12-month average 30-year mortgage rate: 6.03% (…

Agreed - I personally just refined to %2 at 15 years. Never could afford to that until now.

I refied at 2.87 at 30 years but am just paying at the 15 year rate, it actually worked out better somehow and I have the option to drop payments as well. The mortgage broker was a bit surprised it worked out that way.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#129

Post by ffggvv »

kjkjadksj wrote: post #101
MontyCarloHall wrote: post #74

Earlier quoted context omitted.

> excluding down payment Therein lies the rub. It’s true that inflation adjusted average monthly mortgage payments have remained surprisingly constant over the last 40 years [*], since as you point out, low interest rates generally offset high home values (and vice versa). However, accruing enough cash in the first place to afford huge down payments keeps a lot of people out of the market who could otherwise afford t…

A lot of people still buy with like 5% down and pay pmi even in hot markets. There are also first time homeowner benefits. My city offers a down payment loan where you can pay 1% down up to like a 750k home if you are lower income. I think that not a lot of people are well educated on homeownership and think that you need to have a huge down payment or an all cash offer, when thats just not true, and often don’t know…

if you have a jumbo loan you need a much larger downpayment. which is basically required in any state on the coasts.

Re: Home Prices Are Now Higher Than the Peak of the 2000s Housing Bubble

#130

Post by b9a2cab5 »

throwdecro wrote: post #121
PragmaticPulp wrote: post #20

They cite the numbers in "real terms", which would mean inflation adjusted: > The average price of American homes, in real terms, is now the highest it's ever been Of course, you really need to be looking at mortgage rates to understand housing affordability: http://www.freddiemac.com/pmms/pmms30.html July 2021 average 30-year mortgage rate: 2.87% (with 0.7 points) 2008 12-month average 30-year mortgage rate: 6.03% (…

Affordability is only part of the picture though. A higher value loan means higher risk as well. If interest rates rise, or something else happens that reduces the value of the property, then that $500,000 mortgage might be against a house worth less than $500,000. At that point people have to start playing chicken with the banks again, trying to mitigate the losses with strategic defaults.

2008 had a lot of variable rate mortgages. That's not the case today. Most people (at least I'd hope) don't use their house as an investment so if their mortgage is still the same payment each month and they can afford it there's no reason they'd default and tank their credit. The losses are purely paper losses.
Post reply on HN